Investor lending in WA topped nearly $1 billion in December and has reached its highest level in 10 years, according to the latest ABS data.
The figures show lending to investors in the State hit $961 million in a single month — almost $300 million higher than the same time the previous year — but experts warn this will do little to ease pressure on WA’s struggling rental market.
Limnios Property Group managing director James Limnios said the monthly value of property investment lending had more than doubled in WA since early 2021 but it was still nowhere near enough meet demand.
“On current trends, monthly lending to property investors in WA will exceed $1 billion per month in just a couple of months’ time,” he said.
“While this is encouraging news for renters, the harsh reality is that property investment lending will have to increase much further before it starts to impact on rents. This is because the demand for rental properties continues to far exceed supply due to our surging population and also because of the shortage of brand-new rental properties entering the market.”
Momentum Wealth managing director Damian Collins said investor lending in WA would likely reach an all-time high this year but it was still not enough to solve WA’s housing crisis.
“We just can’t build enough homes and there are a lot of people still sitting in high-end rentals that would love to be in their homes that are meant to be built and that’s still a real drag,” he said.
“We built 17,000 homes in the year to September last year, that’s the last available figures. That’s not enough when you’ve got 80,000 people moving here. The problem is that we still just don’t have enough to turn that chronic shortage into a balanced market and I just can’t see that happening any time in the next couple of years if we continue to get this population growth.”
“It’s great when a new investor comes in the market and buys a property and borrows for that. But the problem is, every week, there’s 1500 more people in WA and we need about 600 houses every week just to just to keep up with demand. It’s great but unfortunately not enough to stem the tide of rental growth.”
Real Estate Institute of WA chief executive Cath Hart said she welcomed investors but a significant imbalance between demand and supply remained.
“Builders and developers are also reporting strong sales to Eastern States investors,” she added. “This will boost rental supply in the longer term as houses are completed.”
By Raquel de Brito | The Western Australian
Monday 19 February 2024
